SOUTH AFRICA HOW VITAL TO THE WEST?

Johannesburg
— Shortly after his election as the new United States President, Ronald Reagan told reporters his administration will place less emphasis on human rights -- and more emphasis on countering the Soviet Union.

His words rebounded around the world. To the white minority rulers of the Republic of South Africa they are like music. For four years, the government here has chafed under President Jimmy Carter's criticism of racial discrimination.

Now the South African government sees in the election of Ronald Reagan a possible entree back into the Western world.

"South Africa can use the Reagan years to advantage by making our energy supply to a hungry West indispensable; we must hammer loud and long upon the strategic importance of South Africa in military terms and with regard to raw materials that are essential for military and industrial uses; we must offer our contribution as fighter of Russian expansionism; and we must encourage the new US government to chase the Cubans out of Africa. . ."

So begins a new chapter in South African -- and US -- diplomacy. South Africa will, through a variety of means try to ingratiale itself with the new administration in Washington.

The US, in turn, will be faced with a peculiar problem -- whether to draw closer to a mineral-rich, militarily powerful, vehemently anticommunist regime at the risk of bringing harsh criticism and even economic retaliation from much of the third world.

The US has always had a somewhat ambivalent relationship with South Africa. The US State Department has denounced South Africa's racial discrimination as "one of the cruelest forms of human-rights abuse in the world today." Yet the US maintains full diplomatic relations with Pretoria, and US corporate investment in the country totals more than $1.8 billion.

The Carter administration managed to deflect much of the criticism of this policy, largely due to the personal diplomacy of former United Nations Ambassador Andrew Young and his successor, Donald McHenry, and to the strong human-rights stance of the Presidnt himself.

It is likely that future years would have forced a major reassessment of US policy toward South Africa, however, as the demands of black Africa for firmer action against apartheid rose -- and the conflict in South Africa itself grew more polarized and violent.

Now making that reassessment falls to an incoming Reagan administration -- and it will not be an easy task.

On the one hand, there is substantial evidence that the South African government's racial policies do not have the support of the majority of the population, Pretoria's claims to the contrary notwithstanding. Institutionalized racial discrimination still permeates virtually every facet of South African life. Western notions of civil liberties and due process have been buried under so-called "security" legislation, and warrantless arrests and detentions without trial have become commonplace.

On the other hand, the white government controls what is undeniably a treasure trove of minerals -- a trove on which the US and its Western allies have become heavily reliant. Further, South Africa's position at the southern tip of Africa gives it a certain strategic importance in the subcontinent, not only in military, but also in economic and political terms. And its position between two oceans and alongside one of the world's busiest oil shipping routes also gives South Africa an inherent maritime importance.

But just how important is South Africa to the United States and the West? Moreover, what policies should the US follow to ensure continued access to South Africa's mineral wealth, its harbors, its corridors of power? What are the countervailing Soviet Designs on southern africa, and how should they influence American policy?

Any assessment of the West's strategic stake in South Africa must start with this country's mineral wealth. That wealth is so staggering that terms such as "the Persian Gulf of minerals" are hardly overblown.

Some key statistics:

* In 1979, South Africa produced more than $7 billion worth of gold. Its mines employed tens of thousands of people from seven countries, pumping millions of dollars into the economies of neighboring nations.

* South Africa accounts for one-fifth of the Western world's total uranium exports. Uranium is, of course, essential for nuclear power production.

* Some estimates say that during the 1980s, South Africa will become the world's largest exporter of coal, an increasingly important energy mineral.

All of these riches come from a country that occupies less than 0.8 percent of the earth's land area.

Impressive as these statistics are, critics point to another side of them. The US and other Western countries are no longer on the gold standard and have resisted efforts to remonetize the precious metal. Uranium demand across much of the industrialized world is falling, as nations ponder the safety of nuclear power and seek alternative energy sources. And the US has substantial reserves of coal -- by some estimates, one-third of the world total.

But South Africa has something neither the US nor its allies possess -- an abundance of so-called strategic minerals. These include:

* Chromium. A key element in stainless steel, chromium is essential for production of a wide variety of implements -- from hospital equipment to gun barrels to jet engines. There is no known substitute for chromium and little likelihood of finding one.

The US imports some 90 percent of its chromium needs, and about half of that total comes from South Africa. According to various estimates, South Africa alone has between 68 and 81 percent of world chromite ore reserves.If the higher estimate (that of the South African government) is accepted, that amounts to a 934-year supply at current production levels.

Dr. Earl Parker of the University of California at Berkeley says. "The US is strategically more vulnerable to a long-term chromium embargo than to an embargo of any other natural resources, including petroleum."

* Manganese. Manganese is vital in the production of many steel alloys, and South Africa claims to have some 78 percent of the world's reserves. (US sources place the figure somewhat lower, at about 53 percent. Nevertheless, there is widespread agreement that the South African reserves are substantial.)

South Africa's manganese production, currently pegged at 55 percent of the Western world's total, provides the Us with about one-third of its imports of that metal.

As with chromium, the US is heavily dependent on imports of manganese; about 98 percent of its supply comes from other countries. And that worries some analysts, since without manganese the US steel industry -- and US weapons producers -- might face serious problems.

* Platinum. Vital as a catalyst in the oil refining process, platinum is also a key element in the catalytic converters that limit emission of pollutants in exhaust gases from American cars.

The US imports about 91 percent of its platinum needs, and currently about 55 percent of US imports come from South Africa. South Africa has between 54 and 75 percent of world reserves.

South Africa also provides about three-quarters of American vanadium imports and plays a role in supplying another extremely important mineral, cobalt, to the US.

At present, the US is dependent on Zaire -- a central African country perpetually on the brink of bankdruptcy -- for over 40 percent of its cobalt. And virtually all of Zaire's cobalt exports are shipped over South African rail routes and through South African ports.

In some cases, US allies are just as dependent on South Africa for strategic minerals. West Germany, for example, gets over 50 percent of its manganese imports from South Africa. Britain is dependent on South Africa for some 75 percent of its chromium imports.

"It's very evident that we are one of the top mineral-producing countries in the world," says Dr. Dirk Neething, director of energy for the South African Department of Mineral and Energy Affairs.

Moreover, South Africa's role as a major mineral supplier is likely to grow. This country uses domestic coal for some three-quarters of its energy requirements, and thus can transport and process its raw materials at substantially lower costs than countries that depend on imported oil for such tasks.

Consequently, South Africa is placing greater stress on the further processing of raw materials and is intent on becoming a major supplier of ferromanganese and ferrochromium (minerals alloyed with iron). In addition, South Africa is quietly starting to produce cobalt as a by-product of the platinum mining process (at the behind-the-scenes urging of the US, which is worried about the precarious finances and stability of Zaire).

All of this is enough to establish a certain degree of strategic importance for South Africa. But there is another important reason: The other major holder of several strategic minerals is the Soviet Union.

For example, the Soviet Union and South Africa together account for between 82 and 94 percent of the world's manganese reserves, 93 percent of its vanadium and some 90 percent of its platinum.

There is little likelihood the two countries would form a minerals cartel. After all, South Africa is bitterly opposed to communism and fears the Soviets may work through its restive black population to overthrow the white government.

Some Western analysts share such fears. They argue that should South Africa's mineral wealth fall under Soviet control -- either directly or through the installation of a black puppet government -- the West could be held to ransom over strategic minerals.

Backers of this view cite the so-called Lagovsky theory, named after Soviet strategist A. N. Lagovsky, which holds that the West's reliance on imported minerals, notably chromium, should be exploited to undermine its warmaking capability.

There are some indications the Soviets already have dabbled in mineral price manipulation. Some analysts claim that in 1978 the Soviets began buying up cobalt on world markets. Shortly afterward, guerrillas from Angola -- a Soviet client state -- invaded Zaire's Shaba Province, the source of much of the Western world's cobalt. When production halted and the price of cobalt skyrocketed, the Soviets then reportedly sold the mineral to Western countries at premium prices.

More recently, some experts have suggested that the intervention of Libya, a Soviet ally, in the civil war in Chad may be a grab for Chad's uranium resources.

But some people argue that Soviet price manipulations may not even be the issue.

Dr. Michael Hough, director of the Institute for Strategic Studies at the University of Pretoria, suggests that the ultimate Soviet goal may be "strategic denial" -- the refusal to sell minerals to the West at any price.

John Barratt, director of the South African Institute of International Affairs, says, however, that the "strategic denial" theory remains "just speculation."

"I've never seen any serious indications that that's what the Soviets are trying to do," he adds.

The Soviets have been involved in some unusual activity in the minerals field in recent years, however.

Daniel I. Fine, a resources consultant at the Massachusetts Institute of Technology, notes that beginning 1976, the Soviet Union started major cutbacks on chromium exports. In 1977, it did the same with platinum. By the following year, its manganese exports had been cut, and Soviet satellite states began shopping on the world market.

"The implications of this development for the US and the alliance are deeply disturbing to conventional assumptions of defense and economic security," he adds.

Some observers argue that the Soviets may be stockpiling for war, while others say that their new mineral import dependency may well make the Soviets more aggressively acquisitive -- and increase the likelihood of foreign military adventurism in mineral-rich regions such as southern Africa.

But the truth may be far less dramatic, suggests Phillips Purdy, vice-president of Houston International Minerals Corporation.

"The Russians have the raw materials, but they find it more cost-effective to get them from other nations rather than getting them from their own country," he says.

"They weren't continually developing their own resources," he explains, "they were mining those resources that had already been discovered and that were handy , and suddenly they're running out of them.

"So in the meantime," he concludes, "they've had to go out on the open market and buy. It's basic shortsightedness and economics."

Efforts have been made to insulate US defense needs from minerals cutoffs and disruptions in the marketplace. Since the end of World War II, the US has systematically stockpiled some 93 strategic minerals, metals, and other materials with a 1978 value of $9.4 billion.

Some stockpile goals have yet to be met, however, and experts disagree over the amount, and kind, of materials that should make up the US stockpile.

Nevertheless, a researcher who has just completed an exhaustive study of South Africa's minerals -- Peter Vale, a lecturer in international relations at Johannesburg's University of the Witwatersrand -- says, "The US, it seems to me, hs enough stockpiles to get by, somehow, for three to five years."

But, he adds, "Your allies have virtually none."

The costs of accumulating stockpiles would, by most estimates, be substantial. One estimate is that for West Germany to amass a 97-day stockpile of chrome, the cost would be 300 million deutsche marks (approximately $156 million). The price tag for a six-month cobalt stockpile for Britain is pegged at about $:31 million ($76 million).

A recent US Library of Congress study concluded that an interruption of South African mineral supplies "would not spell disaster" for either the US or its Western allies.

But Mr. Vale points out that the varying degrees of hardship that such a cutoff would cause the Western allies do shape up as an important US foreign policy concern.

"If Reagan is serious about his promises to keep the alliance together, he is going to have to give attention to [this] fact," he observes.

Similarly, experts point out that the US must be cautious in its approach to the question. If South Africa became convinced that Western countries were building up stockpiles in preparation for economic sanctions against this country, they say, it could theoretically cut back exports and drive prices to prohibitively high levels.

That is no a move Pretoria would take lightly, since it would undercut this country's carefully sculpted image as a reliable supplier and could give greater urgency to moves to lessen Western dependence on this country. Still, exports of chrome and manganese account for less than 5 percent of South Africa's mineral export earnings.

As one high-ranking official here says, South Africa's strategic minerals "are much more important to our customers than they are to us."

Would South Africa resort to withholding if the government perceived a threat to the present political order?

South African Prime Minister Pieter W. Botha makes it clear such a move has not been ruled out by Pretoria's strategists.

"America, Western Europe, and Japan are highly dependent on the strategic mineral imports from South Africa," he says.

"If economic sanctions are applied against us, we shall not only fight against it, we shall take steps which will demonstrate the folly of sanctions against South Africa."